- The Euro initially did try to rally a bit during the trading session here on Friday, but you can see that the up trending channel has been pretty significantly respected as we touched it and then fell almost immediately.
- At this point, it looks like the 50-day EMA continues to attract a certain amount of attention, and this is a market that I think continues to be a market that you fade rallies to show signs of exhaustion.
- That's exactly what we're seeing here. And if we drop from here, the 1.16 level could be targeted.
If we break down below there, the 1.1550 level is an area that a lot of people will be watching as potential support. Anything below there then just continues to confirm that we are making a bearish structure.
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200 Day EMA
The 200-day EMA is all the way down at the 1.1376 level, and that is an area that I think we could be aiming for. All things being equal, this is a market that I think continues to be very noisy, and I think ultimately, we are in the midst of a major trend change, so watch that. The US dollar has continued to strengthen quite a bit since the FOMC meeting, which that of course, was supposed to be the death of the US dollar, and it's only strengthened since then.
I think at this point in time, the euro continues to have a lot of issues in and of itself. There is some slowing down in the European economy as seen in the bond markets, and therefore, I'm still bearish.
I think this is a very noisy market, but I do think that the sellers will come in and push to the downside given enough time. I fade short-term rallies that show signs of exhaustion just like we've seen here, but if we were to break above the 1.17 level, then we may make a run to the 1.18 level.
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